Student housing planned near U of M
South Florida developers have plans to transform an old Mcdonald’s site and a former gas station into apartments that will rise near the University of Memphis.
The plans were laid out in documents requesting a tax break from the Economic Development Growth engine of Memphis and Shelby County to make the projects more financially feasible.
On the site of the former Mcdonald’s will be The Grove Townhouses, which would be built on 1.3 acres at 3468 Spottswood Ave. The building would have 20 units, 15 four-bedroom units and five three-bedroom units. Built for students, each room has its own bathroom and the residents would be able to lease individually by the room.
In place of the abandoned gas station will be The Grove Studios at 3440 Southern Ave. These units will be studio apartments about 550 square feet each.
Who is heading the projects
Channing Corporation, led by Zach Channing and headquartered in Palm Beach Gardens about two hours north of Miami, has requested two 10-year payment-in-lieu-of-taxes incentives that would save them nearly $1.2 million in taxes between the two projects.
According to the application submitted to EDGE, the PILOT tax breaks are necessary to both projects which, the company said, will require extensive clean up efforts to to make them safe for residential use.
“The 3440 Southern Ave. site has been an abandoned gas station for 15 years and a source of blight in the neighborhood,” Channing Corp. wrote in its PILOT application. “Additionally, there are environmental concerns that will need to be addressed at this site ... The Southern Ave. Studio project will not be economically feasible without the PILOT.”
Without the PILOT, the return on equity would be less than 5% for the first 12 years after opening, but with the tax break, the company stands to see 10% returns within nine years, the application said. “The abandoned Mcdonald’s site is also an extremely risky site to develop and no new development has occurred in this area in some time,” the application for The Grove Townhouses said. “There are very few feasible options for the abandoned Mcdonald’s site. The most obvious potential use would be another fast food chain. However, Mcdonald’s put a deed restriction on the site, which states that the site can’t be leased, used, or occupied as a restaurant or food service purposes for 20 years.”
A promise of new jobs
The EDGE board will vote on whether to approve the PILOTS at a 3 p.m. meeting Wednesday at the Memphis Area Association of Realtors office at 6393 Poplar Ave. Also on the agenda for that meeting is a $3.7 million jobs PILOT for Patterson Warehouses which plans to move it’s offices to 5388 Airways Blvd.
The company is a third party distributor for retail manufacturers, food and beverage producers, raw materials suppliers and web fulfillment resellers, an application for a tax break said.
In exchange for the tax break, the company promised to bring 41 jobs to Memphis. Eight of the positions will be managers who make an average of $25.48 per hour. The remainder of the jobs will be warehouse, maintenance and office workers making between $15.70 and $18.25 per hour.
Reach Desiree Stennett at desiree.stennett@commercialappeal.com, 901-529-273.